On the heels of President Obama’s $8.4 billion “Clean Power Plan,” policymakers have started offering more details about their energy and regulatory plan. One plan calls for a 700 percent increase in solar power, from about 20 gigawatts (GW) of projected generation by 2020, to 140 GW. This seven-fold increase in solar capacity won’t be cheap. According to American Action Forum (AAF) calculations, it will cost up to $240 billion to install this additional solar capacity by 2020. The climate benefits, always uncertain and dependent on the discount rate, vary between $6.1 billion and $18.3 billion annually.
As support slowly builds for a regulatory budget in the House and Senate, it’s important to take note of the possible benefits of a proper cost accounting for the regulatory state. A high-end scenario, for a true one-in-one-out budget, could save the nation $98.7 billion in annual regulatory burdens.
Despite a proposal from the Department of Transportation to cut $81 million in costs, regulatory burdens still escalated this week. Annual burdens were $245 million, compared to $829 million in benefits; paperwork grew more than 2.5 million hours. EPA’s methane emissions standards for landfills led the week. The per capita regulatory burden for 2015 is $424.
The Environmental Protection Agency (EPA) recently released a series of proposed rules seeking to update methane emissions standards. The first set focuses on containing methane emissions from landfills. The second focuses on emissions from oil and natural gas wells.
President Obama signed executive orders (13,563 and 13,610) as part of an effort to “eliminate red tape.” Federal agencies were told to “modify, streamline expand, or repeal” existing regulations. The recent “retrospective reports” from the administration reveal that executive agencies have added more than $14.7 billion in regulatory costs and 13.4 million paperwork hours. Too often for this administration, regulations are regularly expanded and rarely repealed or modified.
Courtesy of the Securities and Exchange Commission (SEC), regulators published more than $2 billion in costs. Annual burdens were $548 million, compared to just $75 million in benefits; paperwork accelerated by more than 2.8 million hours. SEC’s punitive “Pay Ratio” rule, ostensibly related to Dodd-Frank, led the week.
With any EPA regulation that will shutdown a significant amount of generation capacity, there are concerns over electric reliability. Will the lights stay on? With the potential to retire roughly 33 gigawatts (GW) of coal capacity alone, those fears are magnified with EPA’s “Clean Power Plan,” (CPP).
On August 5, EPA officials working along the Animas River caused the release of more than three million gallons of toxic wastewater, including the neurotoxins lead and arsenic. There has already been a tremendous environmental impact in three states. But what will it cost? If we were to trust past agency estimates: between $338 million and $27.7 billion. There is no direct precedent for the toxic Animas River spill in Colorado and past regulatory actions from agencies, but we can learn from previous benefit-cost estimates. The American Action Forum (AAF) evaluated four recent regulations’ benefit figures to approximate the cost of the current spill in the Mountain West.
This week regulators published $205 million in total regulatory costs, led by a proposal for new efficiency standards for ceiling fan light kits. Annualized burdens were $127 million, compared to $65 million in benefits; paperwork increased by more than 139,000 hours.
Last week, Congress left town for its traditional, month-long August Recess. Meanwhile, the Environmental Protection Agency released the final version of its burdensome “Clear Power Plan,” and the Securities and Exchange Commission finalized its less-covered, yet still consequential, “Pay Ratio Disclosure” rule. Is there any cause for concern that, while Congress is away, the agencies will play? Certain data trends seem to suggest “yes.”
Regulatory costs increased modestly, exceeding $131 million for the week. Annual burdens were $51 million, with $256 million in benefits; paperwork accelerated by almost 300,000 hours. The Department of Labor’s (DOL) Beryllium exposure proposal led all rules.
On Wednesday, the Securities and Exchange Commission (SEC) voted 3-2 to finalize its Pay Ratio Disclosure rule. At $1.8 billion in total costs, it is the 5th most expensive Dodd-Frank final rule.
This week, the Environmental Protection Agency (EPA) released its final greenhouse gas (GHG) standards for existing power plants. According to American Action Forum (AAF) research, the final plan will shutter 66 power plants and eliminate 125,800 jobs in the coal industry. All of these figures are based on EPA data. Perhaps more alarming, using the 2012 baseline for coal generation and projections for 2030 output, the industry could shrink by 48 percent.
• If the Department of Labor’s (DOL) proposed fiduciary rule is implemented, almost all retail investors will see their costs increase by 73-196 percent due to a mass shift toward fee-based accounts. • Firms providing investment advice will see an average of $21.5 million in initial compliance costs and $5.1 million in annual maintenance costs. • Up to 7 million current Individual Retirement Accounts (IRAs) would fail to qualify for an advisory account due to the balance being too low to be profitable for the adviser.
The regulatory pace slowed again this week, with just $152 million in total burdens. Annual costs were $131 million, with no quantified benefits. Despite the slow week, however, paperwork accelerated by 2.5 million hours. The Department of Interior’s (Interior) “Stream Protection Rule” led all rulemakings in costs and paperwork.